---

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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549**______________________****Form 10-Q**

|x                                                    |  | **Quarterly report pursuant to Section
      13 or 15(d) of the Securities Exchange Act of 1934**   
|---------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------
|                                                     |  |                                                                                                     
|**For the quarterly period ended July 31,
    2009**
|                                                    
|**OR**                                              
|                                                    
|o                                                    |  | **Transition report pursuant to
      Section 13 or 15(d) of the Securities Exchange Act of
  1934**

Commission File Number: 001-11807
______________________UNIFY
CORPORATION(Exact name of registrant as specified in its charter)

|Delaware                              | 94-2710559                           
|------------------------------------- | -------------------------------------
|(State or
      other jurisdiction of | (I.R.S.
      Employer Identification
|incorporation
      or organization)  | Number)                              

1420 Rocky Ridge Drive, Suite 380Roseville, California 95661(Address of principal executive
offices)

Telephone: (916) 218-4700(Registrants telephone number, including
area code)

Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90
days.

YESxNO o

Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of large accelerated
filer, accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.

|Large
      accelerated filer o | Accelerated filer o | Non-accelerated filer o                             | Smaller reporting company x
|------------------------------- | ------------------- | --------------------------------------------------- | ---------------------------
|                                |                     | (Do not check
      if a smaller reporting company) |                            

Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act),

YESoNOx

Indicate the number of shares outstanding
of each of the issuers classes of common stock, as of the latest practicable
date: 10,117,425 shares of common stock, $0.001 par value, as of July 31,
2009.

---

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UNIFY CORPORATIONFORM
10-Q

INDEX

|PART I.        |  | FINANCIAL INFORMATION                                                                        |  | 3 
|-------------- |  | -------------------------------------------------------------------------------------------- |  | --
|               |  |                                                                                              |  |   
|Item 1.        |  | Financial Statements                                                                         |  | 3 
|               |  |                                                                                              |  |   
|               |  | Unaudited Condensed Consolidated Balance Sheets as of July 31, 2009
      and April 30, 2009 |  | 3 
|               |  |                                                                                              |  |   
|               |  | Unaudited Condensed Consolidated Statements of Operations for the
      three months         |  | 4 
|               |  | ended July 31, 2009 and 2008                                                                 |  |   
|               |  |                                                                                              |  |   
|               |  | Unaudited Condensed Consolidated Statements of Cash Flows for the
      three months         |  | 5 
|               |  | ended July 31, 2009 and 2008                                                                 |  |   
|               |  |                                                                                              |  |   
|               |  | Notes to Unaudited Condensed Consolidated Financial
      Statements                         |  | 6 
|               |  |                                                                                              |  |   
|Item 2.        |  | Managements Discussion and Analysis of Financial Condition and
      Results of Operations  |  | 18
|               |  |                                                                                              |  |   
|Item 3.        |  | Quantitative and Qualitative Disclosures about Market
      Risk                             |  | 24
|               |  |                                                                                              |  |   
|Item 4.        |  | Controls and Procedures                                                                      |  | 25
|               |  |                                                                                              |  |   
|PART II.       |  | OTHER INFORMATION                                                                            |  | 26
|               |  |                                                                                              |  |   
|Item 1.        |  | Legal Proceedings                                                                            |  | 26
|               |  |                                                                                              |  |   
|Item 6.        |  | Exhibits                                                                                     |  | 27
|              
|SIGNATURE      |  |                                                                                              |  | 28
|               |  |                                                                                             
|CERTIFICATIONS |  |                                                                                              |  |   

2

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PART I. FINANCIAL
INFORMATION

Item 1. Financial
Statements

UNIFY
CORPORATIONUNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS(In thousands)

|                                           |  | July 31, |         | April 30,
|------------------------------------------ |  | -------- | ------- | ---------
|                                           |  | 2009     |         | 2009     
|ASSETS                                     |  |          |         |          
|Current
      assets:                      |  |          |         |          
|Cash and cash
      equivalents            |  | $        | 2,965   |          
|Accounts receivable, net                   |  |          | 7,540   |          
|Prepaid expenses and other current assets  |  |          | 882     |          
|Total current assets                       |  |          | 11,387  |          
|                                          
|Property and equipment, net                |  |          | 554     |          
|Goodwill                                   |  |          | 16,296  |          
|Intangibles, net                           |  |          | 12,351  |          
|Other assets,
      net                    |  |          | 379     |          
|Total assets                               |  | $        | 40,967  |          
|                                          
|LIABILITIES AND STOCKHOLDERS' EQUITY       |  |          |         |          
|Current
      liabilities:                 |  |          |         |          
|Accounts payable                           |  | $        | 1,500   |          
|Current portion of long term debt          |  |          | 1,830   |          
|Accrued compensation and related expenses  |  |          | 2,600   |          
|Other accrued liabilities                  |  |          | 6,571   |          
|Deferred revenue                           |  |          | 9,788   |          
|Total current liabilities                  |  |          | 22,289  |          
|                                          
|Long term debt, net                        |  |          | 704     |          
|Other long term
      liabilities          |  |          | 1,635   |          
|                                          
|Commitments and contingencies              |  |          |        |          
|                                          
|Stockholders equity:                      |  |          |         |          
|Common stock                               |  |          | 10      |          
|Additional paid-in capital                 |  |          | 79,236  |          
|Accumulated other comprehensive loss       |  |          | (145    | )        
|Accumulated deficit                        |  |          | (62,762 | )        
|Total stockholders equity                 |  |          | 16,339  |          
|Total liabilities and stockholders equity |  | $        | 40,967  |          

See accompanying notes to condensed
consolidated financial statements.

3

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UNIFY
CORPORATIONUNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share
data)

|                                                      |  | Three Months Ended
|----------------------------------------------------- |  | ------------------
|                                                      |  | July 31,          
|                                                      |  | 2009              
|Revenues:                                             |  |                   
|Software licenses                                     |  | $                 
|Services                                              |  |                   
|Migration solutions                                   |  |                   
|Total revenues                                        |  |                   
|                                                     
|Cost of Revenues:                                     |  |                   
|Software licenses                                     |  |                   
|Services                                              |  |                   
|Migration solutions                                   |  |                   
|Total cost of revenues                                |  |                   
|Gross
      profit                                    |  |                   
|                                                     
|Operating Expenses:                                   |  |                   
|Product development                                   |  |                   
|Selling, general and administrative                   |  |                   
|Total operating expenses                              |  |                   
|Income (loss) from operations                         |  |                   
|Other income
      (expense), net                     |  |                   
|Income (loss) before income taxes                     |  |                   
|Provision for
      income taxes                      |  |                   
|Net income (loss)                                     |  | $                 
|                                                     
|Net income (loss) per share:                          |  |                   
|Basic                                                 |  | $                 
|Dilutive                                              |  | $                 
|                                                     
|Shares used in computing net income (loss) per share: |  |                   
|Basic                                                 |  |                   
|Dilutive                                              |  |                   

See accompanying notes to condensed
consolidated financial statements.

4

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UNIFY
CORPORATIONUNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)

|                                                                                                  |  | Three Months Ended
|------------------------------------------------------------------------------------------------- |  | ------------------
|                                                                                                  |  | **July 31,**      
|                                                                                                  |  | 2009              
|Cash flows from operating activities:                                                             |  |                   
|Net income (loss)                                                                                 |  | $                 
|Reconciliation of net income (loss) to net cash provided by (used
      in) operating activities: |  |                   
|Loss on sale of other investments                                                                 |  |                   
|Depreciation                                                                                      |  |                   
|Amortization of intangible assets                                                                 |  |                   
|Amortization of discount on notes
payable                                                         |  |                   
|Stock based compensation expense                                                                  |  |                   
|Changes in operating assets and
    liabilities:                                                  |  |                   
|Accounts receivable                                                                               |  |                   
|Prepaid expenses and other current
assets                                                         |  |                   
|Other long term assets                                                                            |  |                   
|Accounts payable                                                                                  |  |                   
|Accrued compensation and related
expenses                                                         |  |                   
|Other accrued liabilities                                                                         |  |                   
|Accrued acquisition costs                                                                         |  |                   
|Deferred revenue                                                                                  |  |                   
|Other long term liabilities                                                                       |  |                   
|Net cash provided by (used in) operating activities                                               |  |                   
|                                                                                                 
|Cash flows from investing activities:                                                             |  |                   
|Acquisition, net of cash acquired                                                                 |  |                   
|Purchases of property and equipment                                                               |  |                   
|Payments on acquisition obligations                                                               |  |                   
|Net cash provided by (used in) investing activities                                               |  |                   
|                                                                                                 
|Cash flows from financing activities:                                                             |  |                   
|Principal payments under debt
obligations                                                         |  |                   
|Net cash used in financing activities                                                             |  |                   
|Effect of
      exchange rate changes on cash                                                     |  |                   
|Net increase (decrease) in cash and cash equivalents                                              |  |                   
|Cash and cash
      equivalents, beginning of period                                              |  |                   
|Cash and cash equivalents, end of
      period                                                    |  | $                 
|Supplemental
      cash flow information:                                                         |  |                   
|Cash received (paid) during the period for:                                                       |  |                   
|Interest                                                                                          |  | $                 
|Taxes                                                                                             |  | $                 
|                                                                                                 
|Supplemental non-cash financing activities:                                                       |  |                   
|Common stock issued in conjunction with
      acquisition                                         |  | $                 

See accompanying notes to condensed
consolidated financial statements.

5

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UNIFY
CORPORATIONNOTES TO UNAUDITED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTSJuly 31, 2009

1. Basis of
Presentation

The condensed consolidated financial
statements have been prepared by Unify Corporation (the Company, we, us,
our) pursuant to the rules and regulations of the Securities and Exchange
Commission (SEC). The accompanying condensed consolidated financial statements
include our accounts and those of our subsidiaries that we control due to
ownership of a controlling interest. Intercompany transactions and balances have
been eliminated. While the interim financial information contained in this
filing is unaudited, such financial statements, in the opinion of management,
reflect all adjustments (consisting only of normal recurring adjustments) which
the Company considers necessary for a fair presentation. The results for interim
periods are not necessarily indicative of the results to be expected for the
entire fiscal year. These financial statements should be read in conjunction
with the Consolidated Financial Statements and Notes thereto, together with
Managements Discussion and Analysis of Financial Condition and Results of
Operations, which are included in the Companys Annual Report on Form 10-K for
the fiscal year ended April 30, 2009, as filed with the SEC.

Revenue
Recognition

The Company generates revenue from
software license sales and related services, including maintenance and support,
and consulting services. Additionally, the Company generates revenue from its
migration solutions products. The Company licenses its products to end-user
customers, independent software vendors (ISVs), international distributors and
value-added resellers (VARs). The Companys products are generally sold with a
perpetual license. The Companys contracts with ISVs, VARs and international
distributors do not include special considerations such as rights of return,
stock rotation, price protection or special acceptance. With the exception of
its migration solutions, the Company recognizes revenue in accordance with
Statement of Position (SOP) 97-2,Software
Revenue Recognition. For migration solutions,
the Company recognizes revenue for software licenses sales in accordance with
Statement of Position 81-1,Accounting for
Performance of Construction-Type and Certain Production-Type Contractsand Accounting Research Bulletin (ARB) 45,Long-Term Construction Type
Contracts. The Company exercises judgment in
connection with the determination of the amount of revenue to be recognized in
each accounting period. The nature of each contractual arrangement determines
how revenues and related costs are recognized.

For software license arrangements that do
not require significant modification or customization of the underlying
software, revenue is recognized when the software product or service has been
shipped or electronically delivered, the license fees are fixed and
determinable, uncertainties regarding customer acceptance are resolved,
collectability is probable and persuasive evidence of an arrangement
exists.

The Company considers a signed
non-cancelable license agreement, a customer purchase order, a customer purchase
requisition, or a sales quotation signed by an authorized purchaser of the
customer to be persuasive evidence that an arrangement exists such that revenue
can be recognized.

For arrangements that require significant
modification or customization of software, revenue is recognized based on
contract accounting under the provisions of Accounting Research Bulletin (ARB)
45,Long-Term Construction Type
Contractsand Statement of Position (SOP)
81-1,Accounting for Performance of
Construction-Type and Certain Production-Type Contracts. For fixed price arrangements the Company uses the
percentage-of-completion method for revenue recognition. Under the
percentage-of-completion method, progress towards completion is measured by
labor hours.

The Companys customer contracts may
include multi-element arrangements that include a delivered element (a software
license) and undelivered elements (such as maintenance and support and/or
consulting). The value allocated to the undelivered elements is unbundled from
the delivered element based on vendor-specific objective evidence (VSOE) of the
fair value of the maintenance and support and/or consulting, regardless of any
separate prices stated within the contract. VSOE of fair value is defined as:
(i) the price charged when the same element is sold separately, or (ii) if the
element has not yet been sold separately, the price for the element established
by management having the relevant authority when it is probable that the price
will not change before the introduction of the element into the marketplace. The
Company then allocates the remaining balance to the delivered element (a
software license) regardless of any separate prices stated within the contract
using the residual method as the fair value of all undelivered elements is
determinable.

We defer revenue for any undelivered
elements, and recognize revenue for delivered elements only when the fair values
of undelivered elements are known, uncertainties regarding customer acceptance
are resolved, and there are no customer-negotiated refund or return rights
affecting the revenue recognized for delivered elements. If we cannot
objectively determine the fair value of any undelivered element included in
bundled software and service arrangements, we defer revenue until all elements
are delivered and services have been performed, or until fair value can
objectively be determined for any remaining undelivered elements.

6

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An assessment of the ability of the
Companys customers to pay is another consideration that affects revenue
recognition. In some cases, the Company sells to undercapitalized customers. In
those circumstances, revenue recognition is deferred until cash is received, the
customer has established a history of making timely payments or the customers
financial condition has improved. Furthermore, once revenue has been recognized,
the Company evaluates the related accounts receivable balance at each period end
for amounts that we believe may no longer be collectible. This evaluation is
largely done based on a review of the financial condition via credit agencies
and historical experience with the customer. Any deterioration in credit
worthiness of a customer may impact the Companys evaluation of accounts
receivable in any given period.

Revenue from support and maintenance
activities, which consist of fees for ongoing support and unspecified product
updates, are recognized ratably over the term of the maintenance contract,
typically one year, and the associated costs are expensed as incurred.
Consulting service arrangements are performed on a best efforts basis and may
be billed under time-and-materials arrangements or fixed price arrangements.
Revenues and expenses relating to providing consulting services are recognized
as the services are performed.

Recently Issued Accounting Standards

In June 2009, the FASB issued SFAS No.
168,"The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principlesa
replacement of FASB Statement No. 162"("SFAS
168"). SFAS 168 establishes the FASB Accounting Standards Codification ("ASC")
as the source of authoritative accounting principles recognized by the FASB.
Following this statement, the FASB will issue new standards in the form of
Accounting Standards Updates ("ASUs"). SFAS 168 is effective for financial
statements issued for interim and annual periods ending after September 15, 2009
and therefore is effective for Unify in the second quarter of fiscal 2010. The
issuance of SFAS 168 will not change GAAP and therefore the adoption of SFAS 168
will only affect the specific references to GAAP literature in the notes to
Unify's consolidated financial statements.

In May 2009, the FASB issued SFAS No. 165,Subsequent Events(SFAS 165). This Statement is intended to establish general standards
of accounting for and disclosure of events that occur after the balance sheet
date but before financial statements are issued or are available to be issued.
It requires the disclosure of the date through which an entity has evaluated
subsequent events and the basis for that date, that is, whether that date
represents the date the financial statements were issued or were available to be
issued. This disclosure should alert all users of financial statements that an
entity has not evaluated subsequent events after that date in the set of
financial statements being presented. SFAS 165 is effective for interim and
annual periods ending after June 15, 2009. We adopted SFAS No. 165 in the first
quarter of fiscal 2010 and it did not result in significant changes to reporting
of subsequent events either through recognition or disclosure.

In September 2006, the FASB issued
Statement No. 157,Fair Value Measurements
(SFAS 157). SFAS 157 defines fair value,
establishes a framework and gives guidance regarding the methods used for
measuring fair value, and expands disclosures about fair value measurements.
SFAS 157 is effective for financial statements issued for fiscal years beginning
after November 15, 2008, and interim periods within those fiscal years. We
adopted SFAS No. 157 in the first quarter of fiscal 2010 and it did not have a
material effect on our consolidated financial statements.

In December 2007, the FASB issued SFAS No.
141 (revised),Business
Combinations. The standard changes the
accounting for business combinations including the measurement of acquirer
shares issued in consideration for a business combination, the recognition of
contingent consideration, the accounting for pre-acquisition gain and loss
contingencies, the recognition of capitalized in-process research and
development, the accounting for acquisition-related restructuring cost accruals,
the treatment of acquisition related transaction costs and the recognition of
changes in the acquirers income tax valuation allowance. Statement 141(R) is
effective for fiscal years beginning after December 15, 2008. We are accounting
for our June 30, 2009 acquisition of AXS-One Inc. under SFAS 141(R).

In December 2007, the FASB issued SFAS No.
160,Noncontrolling Interests in Consolidated
Financial Statements  an amendment of ARB No. 5, which changes the accounting and reporting for minority interests.
Minority interests will be recharacterized as noncontrolling interests and will
be reported as a component of equity separate from the parents equity, and
purchases or sales of equity interests that do not result in a change in control
will be accounted for as equity transactions. In addition, net income
attributable to the noncontrolling interest will be included in net income and,
upon a loss of control, the interest sold, as well as any interest retained,
will be recorded at fair value with any gain or loss recognized in net income.
SFAS No. 160 is effective for us beginning May 1, 2009. We adopted SFAS No. 160
in the first quarter of fiscal 2010 and it did not have a material effect on our
consolidated financial statements.

In March 2008, the FASB issued Statement
No. 161,Disclosures about Derivative
Instruments and Hedging Activities, an
amendment of FASB Statement No. 133. (SFAS No. 161). SFAS No. 161 requires
enhanced disclosures about an entitys derivative instruments and hedging
activities with a view toward improving the transparency of financial reporting,
and iseffective for financial statements issued
for fiscal years and interim periods beginning after November 15, 2008, with
early application encouraged. SFAS No. 161 encourages, but does not require,
comparative disclosures for earlier periods at initial adoption. We have adopted
SFAS No. 161 and it did not have a material impact on our consolidated financial
statements.

7

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On May 9, 2008, the FASB issued FASB Staff
Position No. APB 14-1(FSP APB 14-1),Accounting for Convertible Debt Instruments That May Be Settled in Cash
Upon Conversion (Including Partial Cash Settlement). FSP APB 14-1 requires issuers of convertible debt that may be settled
wholly or partly in cash when converted to account for the debt and equity
components separately. FSP APB 14-1 is effective for fiscal years beginning
after December 15, 2008 and must be applied retrospectively to all periods
presented. We adopted FSP APB 14-1 in the first quarter of fiscal 2010 and it
did not have a material effect on our consolidated financial
statements.

In April 2008, the FASB issued FASB Staff
Position ("FSP") FAS 142-3, "Determination of
Useful Life of Intangible Assets"("FSP FAS
142-3"). FSP FAS 142-3 amends the factors that should be considered in
developing the renewal or extension assumptions used to determine the useful
life of a recognized intangible asset under FAS 142, "Goodwill and Other
Intangible Assets." FSP FAS 142-3 also requires expanded disclosure related to
the determination of intangible asset useful lives. FSP FAS 142-3 is effective
for fiscal years beginning after December 15, 2008. We adopted FAS 142-3 in the
first quarter of fiscal 2010 and it did not have a material effect on our
consolidated financial statements.

In May of 2008, the FASB issued SFAS No.
162,The Hierarchy of Generally Accepted
Accounting Principles.This statement
identifies literature established by the FASB as the source for accounting
principles to be applied by entities which prepare financial statements
presented in conformity with generally accepted accounting principles (GAAP) in
the United States. This statement is effective 60 days following approval by the
SEC of the Public Company Accounting Oversight Board amendments to AU Section
411,The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles.This statement will require no changes in the Companys
financial reporting practices.

2. Acquisitions

Active Data
Corporation

On May 22, 2007, the Company purchased
privately held Active Data Corporation (ADC) for approximately $420,000 plus
earn-out payments of $97,000. ADC provided application migration software that
added Microsofts .NET functionality to Unifys Team Developer product and
provided an additional application migration solution for the Company. Pursuant
to the terms of the purchase agreement, Unify acquired all the outstanding stock
of ADC. ADC did not represent the addition of a significant subsidiary. The
acquisition of ADC did not have a material impact on the financials of Unify and
the results of operations for ADC are included in the Companys results from the
date of acquisition. The ADC purchase price was allocated to tangible and
intangible assets acquired and liabilities assumed based on managements
determination of their estimated fair values. The excess of the purchase price
over the fair value of net assets acquired was allocated to goodwill. The
Company believes the fair values assigned to the assets acquired and liabilities
assumed were based on reasonable assumptions.

CipherSoft Inc.

On January 30, 2009, the Company purchased
privately held CipherSoft Inc. (CipherSoft), headquartered in Calgary, Canada,
for approximately $628,000 plus the assumption of debt of $1,032,000 and future
potential royalty payments to be paid over a four year period following the
acquisition. The royalty payments are based on a percentage of revenue and will
increase goodwill upon being earned. CipherSoft is a leading Oracle partner for
modernization and migration of Oracle applications and provides an additional
application migration solution for the Company. Pursuant to the terms of the
purchase agreement, Unify acquired all the outstanding stock of CipherSoft.
CipherSoft did not represent the addition of a significant subsidiary.

8

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The CipherSoft purchase price was
allocated to tangible and intangible assets acquired and liabilities assumed
based on managements determination of their estimated fair values at the
acquisition date, January 30, 2009. Intangible assets include technologies of
$1,060,000, non-competition agreements of $85,000, consulting agreements of
$110,000 and trade names of $80,000. The excess of the purchase price over the
fair value of net assets acquired was allocated to goodwill. The Company
believes the fair values assigned to the assets acquired and liabilities assumed
were based on reasonable assumptions. The following table summarizes the fair
values of net assets acquired and represents the opening balance sheet for
CipherSoft as of the acquisition date, January 30, 2009 (in thousands):

|Current assets              | $ | 236  
|--------------------------- | - | -----
|Long term
      assets      |   | 22   
|Goodwill                    |   | 780  
|Intangibles                 |   | 1,335
|Total assets                | $ | 2,373
|                           
|Current Liabilities         | $ | 1,099
|Long term
      liabilities |   | 646  
|Total liabilities assumed   | $ | 1,745
|                           
|Total consideration         | $ | 628  

AXS-One Inc.

On June 30, 2009, the Company acquired all
of the issued and outstanding shares of common stock and warrants of AXS-One.
The common stock and warrants were converted into, in the aggregate, 1,000,000
shares of Unify common stock. The outstanding convertible notes of AXS-One with
an aggregate outstanding principal and interest balance of approximately $13
million were exchanged for 1,642,600 shares of Unify common stock. The note
holders may also be issued additional shares of Unify common stock based on
revenue generated from AXS-Ones products over 13 months after the effective
date of the merger.

AXS-One is a leading provider of
integrated content archiving software solutions which enables organizations to
implement secure, scalable and enforceable policies that address records
management for corporate governance, legal discovery and industry regulations.
The acquisition of AXS-One advances the Companys growth strategy to acquire
superior technology companies that can leverage its technology strengths,
extensive customer base and worldwide distribution channel while enabling the
combined company to meet a broader set of customers needs, accelerate direct
and channel sales, and achieve cost synergies.

9

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The goodwill of $9.8 million arising from
the acquisition consists of increased market presence and opportunities,
enhanced product mix and operating efficiencies expected from combining the
operations of Unify and AXS-One. All of the goodwill was assigned to Unifys
Integrated Content Archiving Solutions segment. None of the goodwill recognized is expected to be
deductible for income tax purposes.

The following table summarizes the
consideration paid for AXS-One and the amounts of the assets acquired and
liabilities assumed recognized at the acquisition date, June 30, 2009.

|Consideration                                                                                      |  
|-------------------------------------------------------------------------------------------------- | -
|Equity
      instruments (2,642,600 common shares of Unify)                                        | $
|Contingent consideration arrangement                                                               |  
|Fair value of
      total consideration                                                            | $
|                                                                                                  
|Acquisition related costs(included in selling, general and administrative expense in
      Unify's |  
|statement of operations for three months ended July 31,
    2009)                                  | $
|                                                                                                  
|Recognized amounts of identifiable assets acquired and liabilities
      assumed                   |  
|Financial
      assets                                                                             | $
|Accounts receivable                                                                                |  
|Other
      assets                                                                                 |  
|Property, plant and equipment                                                                      |  
|Identifiable
      intangible assets                                                               |  
|Financial liabilities                                                                              |  
|Deferred
      revenue                                                                             |  
|Total identifiable net assets                                                                      | $
|                                                                                                   |  
|Goodwill                                                                                           |  
|                                                                                                   | $

The fair value of the 2,642,600 common
shares issued as part of the consideration paid for AXS-One ($8,853,000) was
determined on the basis of the closing market price of Unifys common shares on
the acquisition date.

The contingent consideration arrangement
requires Unify to issue to the former holders of AXS-One convertible notes 0.35
shares of Unify common stock for every $1 of AXS-One net license revenue over
the first $2,000,000 for the 13 month period following the acquisition date.
After the holders of AXS-One convertible notes have received in the aggregate
2,580,000 Unify shares (as adjusted to reflect stock splits, stock dividends and
reverse stock splits of Unify) under the earn-out, the shares issued as the
earn-out shall be distributed one-half to the holders of AXS-One convertible
notes and one-half to the former management members until the management members
have received 171,250 Unify shares under the earn-out. Thereafter, any
additional Unify shares issued as earn-out shall be distributed solely to the
holders of AXS-One convertible notes. There is no limit to the total number of
shares that can be earned. The estimated number of shares that Unify will issue
under the contingent consideration arrangement is 1,050,000. The fair value of
the contingent consideration of $4.8 million is based on managements initial
estimate of both expected net license revenue and share price. The fair value of
the contingent consideration is provisional pending receipt of a final
valuation.

The fair value of the acquired
identifiable intangible assets, deferred income tax liabilities and deferred
revenue is provisional pending receipt of the final valuations.Intangible assets include technologies of $5.1 million,
trademarks of $1.1 million, and customer relationships of $3.8
million.

10

---

The amounts of AXS-Ones revenue and
earnings included in the Companys consolidated statement of operations for the
three months ended July 31, 2009, and the revenue and earnings of the combined
entity had the acquisition date been May 1, 2009, or May 1, 2008, are:

|(in
      thousands, except per share amounts)                 | Revenue |  | Net income (loss) |   | Net loss per share
|-------------------------------------------------------------- | ------- |  | ----------------- | - | ------------------
|Actual from July 1, 2009 to July 31, 2009                      | 1,083   |  | (527              | ) |                   
|Supplemental pro
      forma from May 1, 2009 to July 31, 2009 | 6,020   |  | (2,819            | ) |                   
|Supplemental pro forma from May 1, 2008 to July 31, 2008       | 8,428   |  | (2,190            | ) |                   

3. Stock Compensation
Information

Effective May 1, 2006, the Company adopted
the provisions of Statement of Financial Accounting Standards (SFAS) No.
123(R),Share-Based Payment,using the modified version of prospective application. Under
this method, compensation expense includes the estimated fair value of equity
awards vested during the reported period. Expense for equity awards vested is
determined based on the grant date fair value previously calculated for pro
forma disclosures under SFAS No. 148, Accounting for Stock-Based CompensationTransition and DisclosureAn
Amendment of FASB Statement No. 123. For the
quarter ended July 31, 2009, equity-based compensation expense from operations
was comprised of the following (in thousands):

|                                      | Three Months Ended
|------------------------------------- | ------------------
|                                      | July 31,          
|                                      | 2009              
|Cost of Sales                         | $                 
|Product
      Development             |                   
|Selling, General and Administrative   |                   
|Total
      Equity-Based Compensation | $                 

The following table shows remaining
unrecognized compensation expense on a pre-tax basis related to all types of
non-vested equity awards outstanding as of July 31, 2009. This table does not
include an estimate for future grants that may be issued (amounts in thousands).

|Fiscal Year Ending April
      30, |  | Amount
|---------------------------------- |  | ------
|Remainder of 2010                  |  | $     
|2011                               |  |       
|2012                               |  |       
|2013                               |  |       
|2014                               |  |       
|Total                              |  | $     

The cost above is expected to be
recognized over a weighted-average period of 1.61 years.

The Company continues to use the
Black-Scholes option pricing model to estimate fair value of equity awards,
which requires the input of highly subjective assumptions, including the
expected stock price volatility. The Companys calculations are made using the
Black-Scholes option pricing model, with the following weighted average
assumptions for the three months ended July 31, 2009 and 2008, respectively:
expected option life, 12 to 18 months following vesting; stock volatility of 94%
and 89%; risk-free interest rates of 2.4% and 3.0% and no dividends during the
expected term. Not all stock options that have been granted will be exercised.
Accordingly, the Companys calculation of equity-based compensation expense
includes an adjustment for the estimated number of options that will be
forfeited.

Under the 2001 Stock Option Plan (the
2001 Option Plan), the Company may grant options to purchase up to 2,000,000
shares of common stock to eligible employees, directors, and consultants at
prices not less than the fair market value at the date of grant for incentive
stock options and not less than 85% of the fair market value at the date of
grant for non-statutory stock options. Options granted under the 2001 Stock
Option Plan generally vest over four years, are exercisable to the extent
vested, and expire 10 years from the date of grant. Under the 1991 Stock Option
Plan (the 1991 Option Plan) which expired as of March 2001, the Company was
able to grant options to eligible employees, directors and consultants at prices
not less than the fair market value at the date of grant for incentive stock
options and not less than 85% of the fair market value at the date of grant for
non-statutory stock options. Options granted under the 1991 Option Plan
generally vest over four years, are exercisable to the extent vested, and expire
10 years from the date of grant.

11

---

A summary of the Companys stock option
activity for the period ended July 31, 2009 is as follows:

|                              |           |   |                |          |                 |                         | Weighted |           |   |          
|----------------------------- | --------- | - | -------------- | -------- | --------------- | ----------------------- | -------- | --------- | - | ---------
|                              |           |   |                | Weighted |                 | average
      remaining |          | Aggregate
|                              |           |   |                | average  |                 | contractual             |          | intrinsic
|                              | Shares    |   | exercise price |          | term (in years) |                         | value(1)
|Outstanding at April 30, 2009 | 1,075,804 |   |                | $        | 3.93            |                         | 7.22     |           | $ | 496,992  
|Granted                       | 624,500   |   |                | $        | 2.80            |                         |          |           |   |          
|Exercised                     | 0         |   |                | $        | -               |                         |          |           |   |          
|Canceled or expired           | (3,509    | ) |                | $        | 11.92           |                         |          |           |   |          
|Outstanding at July 31, 2009  | 1,696,795 |   |                | $        | 3.50            |                         | 7.72     |           | $ | 1,159,795
|                             
|Exercisable at July 31, 2009  | 691,484   |   |                | $        | 3.42            |                         | 6.15     |           | $ | 642,747  

|(1) |  | Aggregate intrinsic
      value is defined as the difference between the current market value and
      the exercise price and is estimated using the closing price of the
      Companys common stock on the last trading day of the periods ended as of
      the dates indicated.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Total intrinsic value of awards exercised
during the quarters ended July 31, 2009 and July 31, 2008 was $0 and $1,975,
respectively. The total fair value of awards vested during the quarters ended
July 31, 2009 and July 31, 2008 was $237,958 and $136,258, respectively.

A summary of the Companys nonvested stock
option activity for the period ended July 31, 2009 is as follows:

|                            |           |   |       | Weighted    
|--------------------------- | --------- | - | ----- | ------------
|                            |           |   |       | average fair
|                            | Shares    |   | value
|Nonvested at April 30, 2009 | 460,464   |   |       | $           
|Granted                     | 624,500   |   |       | $           
|Vested                      | (76,943   | ) |       | $           
|Canceled or expired         | (2,709    | ) |       | $           
|Nonvested at July 31, 2009  | 1,005,312 |   |       | $           

12

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4.Goodwill and Intangible Assets

The following tables present details of
the Companys goodwill and intangible assets as of July 31, 2009 and April 30,
2009 (in thousands).

|                     |  | Gross    |        |              |   |          |   | Net         |   |       
|-------------------- |  | -------- | ------ | ------------ | - | -------- | - | ----------- | - | ------
|                     |  | carrying |        | Accumulated  |   | carrying |   | Estimated  
|July 31, 2009        |  | amount   |        | amortization |   | amount   |   | useful life
|Infinite Lives:      |  |          |        |              |   |          |   |             |   |       
|Goodwill             |  | $        | 16,296 |              | $ |         |   |             | $ | 16,296
|Finite Lives:        |  |          |        |              |   |          |   |             |   |       
|Customer-related     |  |          | 5,346  |              |   | (861     | ) |             |   | 4,485 
|Technology-based     |  |          | 7,627  |              |   | (1,137   | ) |             |   | 6,490 
|Trademarks           |  |          | 1,200  |              |   | (228     | ) |             |   | 972   
|Trade name           |  |          | 390    |              |   | (143     | ) |             |   | 247   
|Non-compete          |  |          | 95     |              |   | (12      | ) |             |   | 83    
|Consulting agreement |  |          | 123    |              |   | (49      | ) |             |   | 74    
|Total                |  | $        | 31,077 |              | $ | (2,430   | ) |             | $ | 28,647
|                    
|                     |  | Gross    |        |              |   |          |   | Net         |   |       
|                     |  | carrying |        | Accumulated  |   | carrying |   | Estimated  
|April 30, 2009       |  | amount   |        | amortization |   | amount   |   | useful life
|Infinite Lives:      |  |          |        |              |   |          |   |             |   |       
|Goodwill             |  | $        | 6,425  |              | $ |         |   |             | $ | 6,425 
|Finite Lives:        |  |          |        |              |   |          |   |             |   |       
|Customer-related     |  |          | 1,536  |              |   | (742     | ) |             |   | 794   
|Technology-based     |  |          | 2,395  |              |   | (827     | ) |             |   | 1,568 
|Trademarks           |  |          | 300    |              |   | (181     | ) |             |   | 119   
|Trade name           |  |          | 180    |              |   | (107     | ) |             |   | 73    
|Non-compete          |  |          | 85     |              |   | (7       | ) |             |   | 78    
|Consulting agreement |  |          | 110    |              |   | (22      | ) |             |   | 88    
|Total                |  | $        | 11,031 |              | $ | (1,886   | ) |             | $ | 9,145 

Acquired finite-lived intangibles are
generally amortized on a straight line basis over their estimated useful life.
The useful life of finite-lived intangibles is the period over which the asset
is expected to contribute directly or indirectly to future cash flows of the
Company. Intangible assets amortization expense for the three months ended July
31, 2009, was $544,000. Amortization expense for the three months ended July 31,
2008, was $180,000. The estimated future amortization expense related to
intangible assets as of July 31, 2009, is as follows (in thousands):

|Fiscal Year Ending April
      30, |  | Amount
|---------------------------------- |  | ------
|Remainder of 2010                  |  | $     
|2011                               |  |       
|2012                               |  |       
|2013                               |  |       
|2014                               |  |       
|2015                               |  |       
|Total                              |  | $     

13

---

Goodwill at July 31, 2009, represents the
excess of purchase prices over the sum of the amounts assigned to assets
acquired less liabilities assumed. The Company believes these acquisitions will
produce the following results:

- *Increased Market Presence and
  Opportunities:* The addition of the acquired companies should increase the
  combined companys market presence and opportunities for growth in sales and
  earnings.

- Enhanced Product Mix:The
  complementary nature of the Companys products with its acquisitions should
  benefit current customers and provide the combined company with the ability to
  access new customers.
- Operating
  Efficiencies:The combination of the
  Company with its acquisitions provides the opportunity for potential economies
  of scale and cost savings.

The Company believes these primary factors
support the amount of goodwill recognized as a result of the purchase price for
companies it has acquired. Goodwill is tested for impairment on an annual basis
as of April 30, and between annual tests if indicators of potential impairment
exist, using a fair-value-based approach in accordance with FASB
142,Goodwill and Other Intangible
Assets.

5. Credit Facility

On November 20, 2006, the Company entered
into a revolving credit note agreement with ComVest Capital LLC. Under the terms
of the agreement the Company can borrow up to $2.5 million. As of July 31, 2009,
there was no amount outstanding on the revolver. The amount that can be borrowed
under the revolver is based on the amount of eligible foreign and domestic
accounts receivable outstanding. The revolver has an expiration date of November
30, 2010, and the Company incurs interest expense on funds borrowed at the
prevailing prime rate plus 2.25% per annum (5.5% as of July 31, 2009 and 5.5% as
of April 30, 2009).

6. Long-Term Debt

The Companys debt consists of the
following at July 31, 2009 and April 30, 2009 (in thousands):

|                                                                                        | July 31, |        | April 30,
|--------------------------------------------------------------------------------------- | -------- | ------ | ---------
|                                                                                        | 2009     |        | 2009     
|Convertible notes payable to ComVest Capital LLC, interest rate of
      5%, payable in |          |        |          
|installments through September 30, 2010. These notes include
      certain negative     |          |        |          
|covenants and the Company is in compliance with such
      covenants.                   | $        | 1,200  |          
|                                                                                       
|Note Payable, interest rate of 5%, payable in installments through
      April 2011.    |          | 1,015  |          
|                                                                                       
|Note Payable, interest rate of 5%, payable in installments through
      May 2011.      |          | 250    |          
|                                                                                       
|                                                                                       
|Capital leases payable, payable in monthly installments through
      September 2011.   |          | 87     |          
|                                                                                        |          | 2,552  |          
|Less discount on notes payable, net                                                     |          | (18    | )        
|Less current
      portion                                                              |          | (1,830 | )        
|Total long term debt, net                                                               | $        | 704    |          

7. Other Long-Term
Liabilities

In France, the Company is subject to
mandatory employee severance costs associated with a statutory government
regulated plan covering all employees. The plan provides for one month of
severance for the first five years of service with an employer and one fifth of
one year of severance for every one year of service thereafter. In order to
receive their severance payment the employee generally may not retire before age
65 and must be employed at the time of retirement. As of July 31, 2009 and April
30, 2009 the amount of severance is $88,000 and $81,000, respectively. Also
included in other long term liabilities as of July 31, 2009 and April 30, 2009
is $568,000 and $541,000, respectively, of deferred tax liabilities and $257,000
and $271,000 of deferred rent related to the Roseville, California office.
Additionally, included in other long term liabilities as July 31, 2009, is
$722,000 related to the purchase accounting valuation for the Rutherford, New
Jersey office lease.

14

---

8. Maintenance
Contracts

The Company offers maintenance contracts
to its customers at the time they enter into a product license agreement and
renew those contracts and at the customers option, generally annually
thereafter. These maintenance contracts are priced as a percentage of the value
of the related license agreement. The specific terms and conditions of these
initial maintenance contracts and subsequent renewals vary depending upon the
product licensed and the country in which the Company does business. Generally,
maintenance contracts provide the customer with unspecified product maintenance
updates and customer support services. Revenue from maintenance contracts is
initially deferred and then recognized ratably over the term of the agreements.

Changes in the Companys deferred
maintenance revenue during the periods are as follows (in thousands):

|                                                            | Three Months Ended
|----------------------------------------------------------- | ------------------
|                                                            | July 31,          
|                                                            | 2009              
|Deferred maintenance revenue beginning balance              | $                 
|Deferred
      maintenance revenue recognized during period |                   
|Deferred maintenance revenue of new maintenance contracts   |                   
|Deferred
      maintenance revenue ending balance           | $                 

9. Income Taxes

The Company adopted the provisions of FASB
Interpretation (FIN) No. 48,Accounting for
Uncertainty in Income Taxes, on May 1, 2007.
As required by Interpretation 48, which clarifies Statement 109,Accounting for Income Taxes, the Company recognizes the financial statement benefit of a tax
position only after determining that the relevant tax authority would more
likely than not sustain the position following an audit. For tax positions
meeting the more-likely-than-not threshold, the amount recognized in the
financial statements is the largest benefit that has a greater than 50 percent
likelihood of being realized upon ultimate settlement with the relevant tax
authority. At the adoption date, the Company applied Interpretation 48 to all
tax positions for which the statute of limitations remained open.

The Company is subject to income taxes in
the U.S. federal jurisdiction, and various states and foreign jurisdictions. Tax
regulations within each jurisdiction are subject to the interpretation of the
related tax laws and regulations and require significant judgment to apply. In
general, the Company is no longer subject to U.S. federal, state and local, or
non-U.S. income tax examinations by tax authorities for the fiscal years before
2004. The Company does not believe there will be any material changes in its
unrecognized tax positions over the next 12 months. Therefore, no reserves for
uncertain income tax positions have been recorded pursuant to FIN No. 48. The
adoption of FIN No. 48 did not have a material effect on the Companys
consolidated financial position or results of operations.

The Companys policy is to recognize
interest and penalties accrued on any unrecognized tax benefits as a component
of income tax expense. As of July 31, 2009, the Company did not have any accrued
interest or penalties associated with any unrecognized tax benefits, nor did the
Company record any interest expense in the three months ended July 31, 2009.

In September 2008, the State of California
suspended the ability to use net operating loss carry-forwards to offset taxable
income for a two year period.

10. Comprehensive Income
(Loss)

Comprehensive income includes net income
(loss) and net foreign currency translation adjustments. A comprehensive gain
(loss) on foreign currency translations for the three months ended July 31, 2009
and 2008 was ($32,000) and $9,000, respectively.

11. Reverse Stock Split

On June 24, 2007, the Company implemented
a 1 for 5 reverse stock split. The reverse stock split had been previously
approved by the Companys stockholders as part of the Companys March 29, 2007
Annual Meeting.

15

---

12. Income (Loss) Per
Share

Basic earnings (loss) per share is
computed by dividing net income (loss) by the weighted average number of common
shares outstanding during the reporting period. Diluted earnings (loss) per
share is computed similar to basic earnings (loss) per share except that it
reflects the potential dilution that could occur if dilutive securities or other
obligations to issue common stock were exercised or converted into common stock.
For the three months ended July 31, 2009, because of our reported net loss,
potentially dilutive securities were excluded from the per share computations
due to their anti-dilutive effect.

|                                                                 | Three Months Ended
|---------------------------------------------------------------- | ------------------
|(in
      thousands, except per share amounts)                   | July 31,          
|                                                                 | 2009              
|Net income (loss)                                                | $                 
|                                                                
|Weighted average shares of common stock outstanding,
basic       |                   
|Effect of
      dilutive securities                              |                   
|Weighted average shares of common stock outstanding,
    diluted |                   
|                                                                
|Earnings (loss) per share of common stock:                       |                   
|Basic                                                            | $                 
|Diluted                                                          | $                 

The dilutive securities above represent
only those stock options, warrants and convertible debt whose exercise prices
were less than the average market price of the stock during the respective
periods and therefore were dilutive. Potentially dilutive securities that are
not included in the diluted net loss calculation because they would be
antidilutive are employee stock options of 513,865 as of July 31, 2009, and
common stock warrants of 272,633 for the period. The number of shares of stock
options excluded from the above amount because their exercise prices exceeded
the average market price of the stock was 390,305 for the three months ended
July 31, 2008.

16

---

13. Segment Information

FASB Statement No. 131,Disclosures about Segments of an Enterprise and Related
Information, establishes standards for
reporting information about operating segments. Operating segments are defined
as components of an enterprise about which separate financial information is
available that is evaluated regularly by the chief operating decision maker, or
decision making group, in deciding how to allocate resources and in assessing
performance. Our chief operating decision maker is our Chief Executive Officer.
We have evaluated our approach for making operating decisions and assessing the
performance of our business and, beginning in the first quarter of fiscal year
2010, we have determined that we have three reportable segments: Database and
Development Products (DDP), Integrated Content Archiving Solutions and
Modernization & Migration Solutions. Prior to the first quarter of fiscal
year 2010, the Company maintained two reportable segments, Database and
Development Products and Modernization & Migration Solutions. The accounting
policies of the segments are the same as those described in Note 1. We evaluate
performance based on gross margins (total revenues less costs of licenses,
services and migration solutions) before operating costs. We do not manage our
operating costs on a segment basis as many of our sales, marketing and support
personnel regularly work with products from all segments. Additionally, we do
not track assets by segment and therefore asset disclosures by segment are not
relevant and are not presented.

For the first quarter of fiscal 2010 and
2009, total revenue from the United States was $1.2 million and $1.8 million,
respectively. Total revenue from all other countries was $3.3 million in the
first quarter of fiscal 2010 and $3.2 million for the first quarter of fiscal
2009. Total long-lived assets as of July 31, 2009 and 2008, for the United
States, was $24.8 million and $8.1 million, respectively. Total assets in all
other countries were $2.3 million as of July 31, 2009 and $100,000 as of July
31, 2008.

Financial information for the Companys
reportable segments is summarized below (in thousands). Fiscal 2009 segment
information has been reclassified to conform to the fiscal 2010 presentation.

|                                             |  | Three Months
  Ended
|-------------------------------------------- |  | --------------------
|                                             |  | July 31,            
|                                             |  | 2009                
|Total revenues:                              |  |                     
|Database and Development Products            |  | $                   
|Integrated Content Archiving
      Solutions |  |                     
|Modernization and Migration
      Solutions  |  |                     
|Total
    revenues                           |  | $                   
|                                             |  |                     
|Cost of revenue:                             |  |                     
|Database and Development
      Products      |  | $                   
|Integrated Content Archiving
      Solutions |  |                     
|Modernization and Migration
      Solutions  |  |                     
|Total Cost of
      Revenues                 |  | $                   
|                                             |  |                     
|Gross profit:                                |  |                     
|Database and Development
      Products      |  | $                   
|Integrated Content Archiving
      Solutions |  |                     
|Modernization and Migration
      Solutions  |  |                     
|Total Gross
      Profit                     |  | $                   

17

---

UNIFY CORPORATION

Item 2. Managements Discussion and
Analysis of Financial Condition and Results of Operations

The discussion in this Quarterly Report
on Form 10-Q contains forward-looking statements that have been made pursuant to
the provisions of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are based on current expectations, estimates and
projections about the software industry and certain assumptions made by the
Companys management. Words such as anticipates, expects, intends,
plans, believes, seeks, estimates, variations of such words and similar
expressions are intended to identify such forward-looking statements. These
statements are not guarantees of future performance and are subject to certain
risks, uncertainties and assumptions that are difficult to predict; therefore,
actual results may differ materially from those expressed or forecasted in any
such forward-looking statements. Such risks and uncertainties include, but are
not limited to, those set forth herein under Volatility of Stock Price and
General Risk Factors Affecting Quarterly Results and in the Companys Annual
Report on Form 10-K under Business  Risk Factors. Unless required by law, the
Company undertakes no obligation to update publicly any forward-looking
statements, whether as a result of new information, future events or otherwise.
However, readers should carefully review the risk factors set forth in other
reports or documents the Company files from time to time with the SEC,
particularly the Companys Annual Report on Form 10-K, Quarterly Reports on Form
10-Q and any Current Reports on Form 8-K.

The following discussion should be read in
conjunction with the unaudited Condensed Consolidated Financial Statements and
Notes thereto in Part I, Item 1 of this Quarterly Report on Form 10-Q and with
the audited Consolidated Financial Statements and Notes thereto, together with
Managements Discussion and Analysis of Financial Condition and Results of
Operations, which are included in the Companys Annual Report on Form 10-K for
the fiscal year ended April 30, 2009, as filed with the SEC.

Overview

Unify (the Company, we, us or our)
is a global provider of application modernization, data management and
application development solutions. Our migration solutions, integrated content
archiving solutions, development software and embedded databases allow customers
to modernize and maximize their application environment. Our award-winning
technologies help organizations drive business optimization, improve
collaboration, increase customer service and reduce costs. Unifys strategy is
to help businesses modernize mission-critical legacy applications and data.
Based on market requirements for application modernization, our solutions help
companies increase speed and agility, improve asset reuse, lower IT costs,
reduce business risks and exposures, and free information previously locked
within proprietary systems.

The Company sells and markets application
development and database software and services, integrated content archiving
solutions and modernization solutions through three segments. The segments are
the Database and Development Products (DDP), Integrated Content Archiving
Solutions and our Modernization & Migration Solutions.

Unifys customers include corporate
information technology departments (IT), software value-added resellers
(VARs), solutions integrators (SIs) and independent software vendors
(ISVs) from a variety of industries, including insurance, financial services,
healthcare, government, manufacturing, retail, education, and more. We are
headquartered in Roseville, California, with offices in Maryland, New Jersey,
Canada, Australia, Singapore, France, Germany, and the United Kingdom (UK). We
market and sell products directly in the United States, Europe, Canada,
Singapore and Australia and indirectly through global distributors and resellers
representing more than 50 countries.

Our application modernization solutions
help organizations migrate and maximize investments in their existing
applications and data. Our Modernization and Migration Solutions, and Software
products are built to increase productivity, eliminate risk and substantially
reduce time and costs. Our application development and data management software
products include Team Developer, SQLBase, SQLBase Treasury, NXJ, DataServer,
VISION and ACCELL. Our Modernization and Migration Solutions include Composer
for Lotus Notes which delivers a like-for-like migration of Lotus Notes
applications to the Microsoft .NET and SharePoint platforms and Composer
Sabertooth which speeds the conversion of Team Developer or SQLWindows
applications to Microsoft .NET. We also have an integrated content archiving
software solution, the AXS-One Compliance Platform , which enables
organizations to securely capture, index, archive, retrieve, review, share,
search, supervise and manage the retention, disposition, preservation and
destruction of electronic records.

18

---

Critical Accounting
Policies

The following discussion and analysis of
the Companys financial condition and results of operations are based upon our
consolidated financial statements, which have been prepared in accordance with
accounting principles generally accepted inthe
United States. The preparation of these financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses, and related disclosure of contingent liabilities. We base
our estimates on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions. The areas that
require significant judgment are as follows.

Revenue Recognition

The Company generates revenue from
software license sales and related services, including maintenance and support,
and consulting services. Additionally, the Company generates revenue from its
migration solutions products. The Company licenses its products to end-user
customers, independent software vendors (ISVs), international distributors and
value-added resellers (VARs). The Companys products are generally sold with a
perpetual license. The Companys contracts with ISVs, VARs and international
distributors do not include special considerations such as rights of return,
stock rotation, price protection or special acceptance. With the exception of
its migration solutions, the Company recognizes revenue in accordance with
Statement of Position (SOP) 97-2,Software
Revenue Recognition. For migration solutions,
the Company recognizes revenue for software licenses sales in accordance with
Statement of Position 81-1,Accounting for
Performance of Construction-Type and Certain Production-Type Contractsand Accounting Research Bulletin (ARB) 45,Long-Term Construction Type
Contracts. The Company exercises judgment in
connection with the determination of the amount of revenue to be recognized in
each accounting period. The nature of each contractual arrangement determines
how revenues and related costs are recognized.

For software license arrangements that do
not require significant modification or customization of the underlying
software, revenue is recognized when the software product or service has been
shipped or electronically delivered, the license fees are fixed and
determinable, uncertainties regarding customer acceptance are resolved,
collectability is probable and persuasive evidence of an arrangement
exists.

The Company considers a signed
non-cancelable license agreement, a customer purchase order, a customer purchase
requisition, or a sales quotation signed by an authorized purchaser of the
customer to be persuasive evidence that an arrangement exists such that revenue
can be recognized.

For arrangements that require significant
modification or customization of software, revenue is recognized based on
contract accounting under the provisions of Accounting Research Bulletin (ARB)
45,Long-Term Construction Type
Contractsand Statement of Position (SOP)
81-1,Accounting for Performance of
Construction-Type and Certain Production-Type Contracts. For fixed price arrangements the Company uses the
percentage-of-completion method for revenue recognition. Under the
percentage-of-completion method, progress towards completion is measured by
labor hours.

The Companys customer contracts include
multi-element arrangements that include a delivered element (a software license)
and undelivered elements (such as maintenance and support and/or consulting).
The value allocated to the undelivered elements is unbundled from the delivered
element based on vendor-specific objective evidence (VSOE) of the fair value of
the maintenance and support and/or consulting, regardless of any separate prices
stated within the contract. VSOE of fair value is defined as: (i) the price
charged when the same element is sold separately, or (ii) if the element has not
yet been sold separately, the price for the element established by management
having the relevant authority when it is probable that the price will not change
before the introduction of the element into the marketplace. The Company then
allocates the remaining balance to the delivered element (a software license)
regardless of any separate prices stated within the contract using the residual
method as the fair value of all undelivered elements is determinable.

We defer revenue for any undelivered
elements, and recognize revenue for delivered elements only when the fair values
of undelivered elements are known, uncertainties regarding customer acceptance
are resolved, and there are no customer-negotiated refund or return rights
affecting the revenue recognized for delivered elements. If we cannot
objectively determine the fair value of any undelivered element included in
bundled software and service arrangements, we defer revenue until all elements
are delivered and services have been performed, or until fair value can
objectively be determined for any remaining undelivered elements.

An assessment of the ability of the Companys
customers to pay is another consideration that affects revenue recognition. In
some cases, the Company sells to undercapitalized customers. In those
circumstances, revenue recognition is deferred until cash is received, the
customer has established a history of making timely payments or the customers
financial condition has improved. Furthermore, once revenue has been recognized,
the Company evaluates the related accounts receivable balance at each period end
for amounts that we believe may no longer be collectible. This evaluation is
largely done based on a review of the financial condition via credit agencies
and historical experience with the customer. Any deterioration in credit
worthiness of a customer may impact the Companys evaluation of accounts
receivable in any given period.

19

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Revenue from support and maintenance
activities, which consist of fees for ongoing support and unspecified product
updates, are recognized ratably over the term of the maintenance contract,
typically one year, and the associated costs are expensed as incurred.
Consulting service arrangements are performed on a best efforts basis and may
be billed under time-and-materials or fixed price arrangements. Revenues and
expenses relating to providing consulting services are generally recognized as
the services are performed.

Deferred Tax Asset Valuation
Allowance

As of April 30, 2009, we had approximately
$17.1 million of deferred tax assets related principally to net operating loss
carryforwards, reserves and other accruals, and foreign tax credits. The
Companys ability to utilize net operating loss carryforwards may be subject to
certain limitations in the event of a change in ownership. A valuation allowance
has been recorded to offset these deferred tax assets. The ability of the
Company to ultimately realize its deferred tax assets will be contingent upon
the Company achieving taxable income. There is no assurance that this will occur
in amounts sufficient to utilize the deferred tax assets. Should we determine
that we would be able to realize the deferred tax assets in the future in excess
of the recorded amount, an adjustment to the deferred tax asset would increase
income in the period such determination was made.

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Results of Operations

The following table sets forth, for the
periods indicated, certain financial data as a percentage of total revenue:

|                                        |  | Three Months
      Ended |  
|--------------------------------------- |  | ------------------------ | -
|                                        |  | July 31,                 |  
|                                        |  | 2009                     |  
|Revenues:                               |  |                          |  
|Software
      licenses                 |  | 31.1                     |  
|Services                                |  | 63.3                     |  
|Migration solutions                     |  | 5.6                      |  
|Total revenues                          |  | 100.0                    |  
|                                        |  |                          |  
|Cost
      of Revenues:                 |  |                          |  
|Software licenses                       |  | 0.8                      |  
|Services                                |  | 9.3                      |  
|Migration solutions                     |  | 3.0                      |  
|Total cost of
      revenues            |  | 13.1                     |  
|                                        |  |                          |  
|Gross profit                            |  | 86.9                     |  
|                                        |  |                          |  
|Operating Expenses:                     |  |                          |  
|Product development                     |  | 31.1                     |  
|Selling, general and administrative     |  | 106.8                    |  
|Total operating
      expenses          |  | 137.9                    |  
|Income (loss) from
      operations     |  | (51.0                    | )
|Other income (expense), net             |  | 1.8                      |  
|Income (loss) before income
      taxes |  | (49.2                    | )
|Provision for income taxes              |  | 0.2                      |  
|Net income
(loss)                       |  | (49.4                    | )

Total Revenues

The Company generates revenue from
software license sales and related services, including maintenance and support,
and consulting services. We license our software through our direct sales force
in the United States, Asia Pacific, Europe and through indirect channels
comprised of distributors, ISVs, VARs, and other partners worldwide.

Total revenues in the first quarter of
fiscal 2010 were $4.5 million, a decrease of $0.5 million from the first quarter
of fiscal 2009. This represents a decrease of 10% from the first quarter of
fiscal 2009 revenues of $5.0 million. The decrease in revenue was primarily the
result of the impact of the world-wide deterioration in the economic
environment. During the first quarter of fiscal 2010 the Company saw its tools
and database customers delay product purchases or reduce their buying patterns
to multiple just-in-time small deals versus the larger deals we experienced in
previous years. Additionally, on a year of year basis the euro declined against
the dollar further reducing revenue on a comparative basis. Included in total
revenues is $1.1 million of revenue resulting from the June 30, 2009 acquisition
of AXS-One. Total software license revenues in the first quarter of fiscal 2010
were $1.4 million, a decrease of $0.2 million from the first quarter of fiscal
2009. This represents a decrease of 10% over the first quarter of fiscal 2009
revenues of $1.6 million. Total services revenues in the first quarter of fiscal
2010 and 2009 were $2.9 million and $3.0 million, respectively. Total migration
solutions revenue in the first quarter of fiscal 2010 was $0.3 million compared
to $.5 million for the first quarter of fiscal 2009.

For the first quarter of fiscal 2010 and
2009, total revenues from the United States were 27% and 35% of total revenues,
respectively. Total revenue from the United States in absolute dollars was $1.2
million for the first quarter of fiscal 2010 and $1.7 million for the first
quarter of fiscal 2009. Total revenue from all other countries was $3.3 million
in the first quarter of fiscal 2010 and $3.3 million for the first quarter of
fiscal 2009. On a percentage basis, revenue from other countries was 73% for the
first quarter of fiscal 2010 and 65% for fiscal 2009.

21

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Cost of Revenues

Cost of Software Licenses.Cost of software licenses consists primarily
of royalty payments and the amortization of purchased technology from third
parties that is amortized ratably over the technologys expected useful life.
Cost of software licenses was $38,000 and $50,000 for the first quarter of
fiscal 2010 and fiscal 2009, respectively. The decrease in cost of software
licenses represents a decrease in software royalty payments.

Cost of Services.Cost of services consists primarily of employee, facilities
and travel costs incurred in providing customer support under software
maintenance contracts and consulting and services. Cost of services was $419,000
and $251,000 for the first quarter of fiscal 2010 and fiscal 2009, respectively.
The increase is due primarily to the addition of AXS-One employees.

Cost of Migration Solutions.Cost of migration solutions consists
primarily of both expenses associated with employees involved in migration
projects and also expenses related to third party assistance. Cost of migration
solutions was $137,000 and $160,000 for the first quarter of fiscal 2010 and
fiscal 2009, respectively.

Operating Expenses

Product Development.Product development expenses consist primarily of employee and
facilities costs incurred in the development and testing of new products and in
the porting of new and existing products to additional hardware platforms and
operating systems. Product development costs in the first quarter of fiscal 2010
were $1.4 million compared to $0.7 million in the same period of fiscal 2009.
The increase in product development expenses in fiscal 2010 was primarily the
result of expenses incurred related to our acquisition of CipherSoft in January
2009 and our acquisition of AXS-One in June 2009.

Selling, General and Administrative.Selling, general and administrative
(SG&A) expenses consist primarily of salaries and benefits, marketing
programs, travel expenses, professional services, facilities expenses and bad
debt expense. SG&A expenses were $4.8 million in the first quarter of fiscal
2010 and $3.4 million for the first quarter of fiscal 2009. The major components
of SG&A for the first quarter of fiscal 2010 were sales expenses of $2.2
million, marketing expenses of $0.2 million and general and administrative
expenses of $2.4 million. For the first quarter of fiscal 2009, the major
components of SG&A were sales expenses of $1.7 million, marketing expenses
of $0.2 million and general and administrative expenses of $1.5 million. The
increase in SG&A expenses in fiscal 2010 was primarily the result of
expenses incurred related to our acquisition of CipherSoft in January 2009 and
our acquisition of AXS-One in June 2009.

Other Income (Expense),
Net.Other income (expense), net consists
primarily of interest expense, foreign exchange gains and losses and other
income. Interest expense for the first quarter of fiscal 2010 and 2009 was
$59,000 and $47,000, respectively. Interest expense consists primarily of
interest incurred on notes payable resulting from a debt financing in
conjunction with the November 2006 acquisition of Gupta Technologies LLC and the
acquisition of CipherSoft Inc., plus the amortization of related debt issuance
costs and the amortization of the discount on notes payable. Foreign exchange
rate gains for the first quarter of fiscal 2010 were $77,000. Foreign exchange
rate gains in the first quarter of fiscal 2009 were $9,000. Other income for the
first quarter of fiscal 2010 and 2009 was $60,000 and $20,000,
respectively.

Provision for Income Taxes.For the first quarter of fiscal 2010, the
Company recorded $8,000 in foreign withholding tax expense. For the first
quarter of fiscal 2009, the Company recorded $32,000 in federal and state income
tax expenses.

22

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Liquidity and Capital
Resources

At July 31, 2009, the Company had cash and
cash equivalents of $3.0 million, compared to $6.1 million at April 30, 2009.
The Company had net accounts receivable of $7.5 million as of July 31, 2009, and
$4.5 million as of April 30, 2009.

As of July 31, 2009 the Company has
various notes payable outstanding in the amount of $2.5 million of which $1.8
million is current. The notes payable all have an interest rate of 5%. The
Company also has a $2.5 million revolver with an interest rate of prime plus
2.25% which has a maturity date of November 30, 2010. As of July 31, 2009 there
is nothing outstanding on the revolver.

We believe the existing cash balance of
$3.0 million as of July 31, 2009, along with forecasted operating cash flows and
the revolver credit facility, will provide us with sufficient working capital
for us to meet our operating needs for the next 12 months. Our operating plan
assumes normal operations for the Company and the required debt service
payments.

In fiscal 2010, we plan to increase the
marketing of our Composer product lines and we also anticipate releasing new
versions of some of our Rapid Application Development Products as well as our
Database Management Products. Additionally, as a result of our purchase of
AXS-One we expect to offer our integrated content archiving solutions through
our distribution channels and accelerate direct and channel sales in fiscal 2010. The fiscal
2010 plan requires few additional strategic investments in sales, marketing or
implementation services. We believe our fiscal 2010 plan will generate positive
cash flow as a result of increased revenues for our Composer product lines and
our integrated content archiving solutions.

Operating Cash Flow. For the first quarter of fiscal year 2010 cash used by
operations was $3.1 million. This compares to cash flows provided by operations
of $0.6 million for the first quarter of fiscal 2009. Cash flows used by
operations for the first three months of fiscal 2010 principally resulted from a
net loss of $2.2 million, an increase in accounts receivable of $2.4 million, a
decrease in accounts payable of $0.7 million, a decrease in accrued compensation
and related expenses of $0.4 million, a decrease in other accrued liabilities of
$0.1 million and a decrease in other long term liabilities of $0.2 million.
Offsetting these amounts was an increase in deferred revenue of $2.1 million, a
decrease in prepaid expenses and other current assets of $0.3 million,
amortization of intangible assets of $0.5 million and stock based compensation
expense of $0.2 million.

Cash flows provided by operations for the
first three months of fiscal 2009 principally resulted from $0.4 million in net
income from continuing operations, a decrease of $1.5 million in accounts
receivable, an increase of $0.1 million in accounts payable and increase of $0.1
million in other long term liabilities, $0.2 million in amortization of
intangible assets and $0.1 million of stock based compensation expense.
Offsetting these amounts was a decrease of $0.5 million in accrued compensation
and related expenses, a decrease of $1.2 million in deferred revenue and an
increase of $0.2 million in other accrued liabilities.

Investing Cash Flows. Cash provided in investing activities was $0.1 million for
the first three months of fiscal 2010 and was primarily the result of cash
acquired through the acquisition of AXS-One.

Financing Cash Flows.Net cash used in financing activities for the first three
months of fiscal 2010 was $147,000. Cash used in financing activities was the
result of $147,000 of principal payments on debt obligations. Net cash used in
financing activities for the first three months of fiscal 2009 was
$2,000.

23

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A summary of certain contractual
obligations as July 31, 2009 is as follows (in thousands):

|                                         |  | Payments Due by Period
|---------------------------------------- |  | ----------------------
|                                         |  |                       
|Contractual
      Obligations            |  | Total                 
|Long-term debt                           |  | $                     
|Estimated interest
      expense         |  |                       
|Other
      liabilities                  |  |                       
|Capital leases                           |  |                       
|Operating leases                         |  |                       
|Total contractual cash
      obligations |  | $                     

Other liabilities primarily includes
contractual severance payments related to the AXS-One acquisition.

Volatility of Stock Price and General
Risk Factors Affecting Quarterly Results

Unifys common stock price has been and is
likely to continue to be subject to significant volatility. A variety of factors
could cause the price of the common stock to fluctuate, perhaps substantially,
including: announcements of developments related to our business; fluctuations
in the operating results and order levels of Unify or its competitors; general
conditions in the computer industry or the worldwide economy; announcements of
technological innovations; new products or product enhancements from us or our
competitors; changes in financial estimates by securities analysts; developments
in patent, copyright or other intellectual property rights; and developments in
our relationships with our customers, distributors and suppliers; legal
proceedings brought against the Company or its officers; and significant changes
in our senior management team. In addition, in recent years the stock market in
general, and the market for shares of equity securities of many high technology
companies in particular, have experienced extreme price fluctuations which have
often been unrelated to the operating performance of those companies. Such
fluctuations may adversely affect the market price of our common stock.

Unifys stock began trading on the NASDAQ
under the symbol UNFY on August 25, 2008. Previously the Companys shares traded
over-the-counter on the bulletin board. Even though the Company has moved to a
larger exchange with the NASDAQ, we do not receive any analyst coverage, the
Companys shares are still thinly traded and our stock is considered to be a
micro-cap stock. Our stock is therefore subject to greater price volatility than
larger companies whose stock trades more actively.

Unifys quarterly operating results have
varied significantly in the past and we expect that they could vary
significantly in the future. Such variations could result from the following
factors: the size and timing of significant orders and their fulfillment; demand
for our products; the quantity, timing and significance of our product
enhancements and new product announcements or those of our competitors; our
ability to integrate acquisitions; our ability to attract, integrate and retain
key employees; seasonality; changes in our pricing or our competitors;
realignments of our organizational structure; changes in the level of our
operating expenses; incurrence of extraordinary operating expenses, changes in
our sales incentive plans; budgeting cycles of our customers; customer order
deferrals in anticipation of enhancements or new products offered by us or our
competitors; product life cycles; product defects and other product quality
problems; currency fluctuations; and general domestic and international economic
and political conditions.

Due to the foregoing factors, quarterly
revenues and operating results may vary on a quarterly basis. Revenues and
quarterly results may vary because software technology is rapidly evolving, and
our sales cycle, from initial evaluation to purchase and the providing of
maintenance services, can be lengthy and varies substantially from customer to
customer. Because we normally deliver products within a short time of receiving
an order, we typically do not have a backlog of orders. As a result, to achieve
our quarterly revenue objectives, we are dependent upon obtaining orders in any
given quarter for shipment in that quarter. Furthermore, because many customers
place orders toward the end of a fiscal quarter, we generally recognize a
substantial portion of our software license revenues at the end of a quarter.
Our expense levels largely reflect our expectations for future revenue and are
therefore somewhat fixed in the short term. We expect that our operating results
will continue to be affected by the continually challenging IT economic
environment as well as by seasonal trends.

Item 3. Quantitative and Qualitative
Disclosures about Market Risk

Interest Rate Risk. The Companys exposure to market rate risk for changes in
interest rates relates primarily to its investment portfolio, which consists of
cash equivalents. Cash equivalents are highly liquid investments with original
maturities of three months or less and are stated at cost. Cash equivalents are
generally maintained in money market accounts which have as their objective
preservation of principal. The Company does not believe its exposure to interest
rate risk is material for cash and cash equivalents, which totaled $3.0 million as of July 31, 2009. Unify had no
short-term investments at July 31, 2009.

24

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In November 2006, the Company entered into
a revolving credit facility agreement with ComVest whereby ComVest would provide
up to $2.5 million through a revolving credit facility. The revolver has an
interest rate of prime plus 2.25% and has a maturity date of November 30, 2010.
Should the prime interest rate increase during the life of the revolver, the
Company would have exposure to interest rate risk if it has a large balance
outstanding on the revolver. As of July 31, 2009, there was no amount
outstanding on the revolver.

Unify does not use derivative financial
instruments in its short-term investment portfolio, and places its investments
with high quality issuers only and, by policy, limits the amount of credit
exposure to any one issuer. The Company is averse to principal loss and attempts
to ensure the safety of its invested funds by limiting default, market and
reinvestment risk.

Foreign Currency Exchange Rate
Risk. As a global concern, the Company faces
exposure to adverse movements in foreign currency exchange rates. These
exposures may change over time as business practices evolve and could have an
adverse impact on the Companys business, operating results and financial
position. Historically, the Companys primary exposures have related to local
currency denominated sales and expenses in Europe, Japan and Australia. For
example, when the U.S. dollar strengthens against the major European currencies,
it results in lower revenues and expenses recorded for those regions when
translated into U.S. dollars.

Due to the substantial volatility of
currency exchange rates, among other factors, the Company cannot predict the
effect of exchange rate fluctuations on its future operating results. Although
Unify takes into account changes in exchange rates over time in its pricing
strategy, it does so only on an annual basis, resulting in substantial pricing
exposure as a result of foreign exchange volatility during the period between
annual pricing reviews. The Company also has currency exchange rate exposures on
intercompany accounts receivable and intercompany accounts payable related to
activities with the Companys operations in France, Germany, UK, Australia,
Singapore and Canada. At July 31, 2009, the Company had $2.1 million in such
payables denominated in Euros and U.S. dollars, and a total $4.3 million in
receivables denominated in Euros, Canadian dollars, Australian dollars,
Singapore dollars, U.S. dollars and pounds sterling. The Company engages in no
hedging activities to reduce the risk of such fluctuations. A hypothetical ten
percent change in foreign currency rates could have a significant impact on the
Companys business, operating results and financial position. The Company has
not experienced material exchange losses on intercompany balances in the past;
however, due to the substantial volatility of currency exchange rates, among
other factors, it cannot predict the effect of exchange rate fluctuations on its
future business, operating results and financial position.

Item 4. Controls and
Procedures

(a)Evaluation of Disclosure Controls and Procedures. Under the supervision and with the participation of our
management, including our chief executive officer and chief financial officer,
we evaluated the effectiveness of our disclosure controls and procedures, as
such term is defined under Rule 13a-15(e) promulgated under the Securities
Exchange Act of 1934, as amended. Based upon that evaluation, our chief
executive officer and chief financial officer concluded that our disclosure
controls were effective as of the end of the period covered by this quarterly
report.

(b)Changes in Internal Controls. There
have been no changes in our internal controls over financial reporting that
occurred during the first three months of fiscal year 2010 that have materially
affected, or are reasonably likely to materially affect, our internal controls
over financial reporting.

25

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UNIFY CORPORATION

PART II. OTHER
INFORMATION

Item 1. Legal
Proceedings

Litigation

The Company
is subject to legal proceedings and claims arising in the ordinary course of
business. If such matters arise, the Company cannot assure that it would prevail
in such matters, nor can it assure that any remedy could be reached on mutually
agreeable terms, if at all. Due to the inherent uncertainties of litigation,
were there any such matters, the Company would not be able to accurately predict
their ultimate outcome. As of July 31, 2009, there were no current proceedings
or litigation involving the Company that management believes would have a
material adverse impact on its financial position, results of operations, or
cash flows.

26

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Item 6. Exhibits

|     |  | **Exhibits**                                                                                                                                          
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------
|31.1 |  | Certification of Chief Executive Officer under Section 302 of
      the Sarbanes-Oxley Act of 2002.                                                   
|     |  |                                                                                                                                                       
|31.2 |  | Certification of Chief Financial Officer under Section 302 of
      the Sarbanes-Oxley Act of 2002.                                                   
|     |  |                                                                                                                                                       
|32.1 |  | Certification of Chief Executive Officer under 18 U.S.C
      Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
      of 2002.
|     |  |                                                                                                                                                       
|32.2 |  | Certification of Chief Financial Officer under 18 U.S.C
      Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
      of 2002.

27

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UNIFY CORPORATIONSIGNATURE

Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.

|Date: September 18,
      2009 | Unify
      Corporation                           
|------------------------------ | --------------------------------------------------
|                               | (Registrant)                                      
|                              
|                               | By:                                               
|                              
|                               | /s/ STEVEN D. BONHAM                              
|                               | Steven D.
      Bonham                            
|                               | Chief Financial
      Officer                     
|                               | (Principal Financial and
      Accounting Officer)

28

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